Natural justice in ex parte reassessment overrides limitation when notice was not served and hearing was denied.

An ex parte reassessment made without service of notice or an opportunity of hearing was held unsustainable where the record itself showed that notice had not been served because the business had closed and the dealer's whereabouts were unknown. The appellate authority had dismissed the challenge as time-barred under the Karnataka Value Added Tax Act, 2003, but the court held that delay in appeal could not defeat a challenge to an order that suffered from a foundational breach of natural justice. The reassessment and appellate orders were quashed, and the matter was remitted to the assessing authority for fresh adjudication on merits after hearing the dealer.

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Issues: Whether the ex parte reassessment order and the appellate order dismissing the appeal as time-barred were liable to be quashed for breach of natural justice, and whether the matter required remand for fresh consideration on merits.

Analysis: The reassessment was made on the footing that the books of account for the relevant period were not produced and input tax credit was disallowed. The appellate authority rejected the appeal as barred by limitation under the Karnataka Value Added Tax Act, 2003. The writ court, however, noticed that the reassessment order itself recorded that no notice had been served because the business had closed and the dealer's whereabouts were not known. In that situation, the original assessment had proceeded ex parte without hearing the petitioner. The court held that the petitioner could not be prejudiced by the delay in appeal when the foundational order itself had been passed without affording an opportunity of hearing.

Conclusion: The ex parte reassessment order and the appellate order were quashed and the matter was remitted to the assessing authority for fresh adjudication after hearing the petitioner, without being controlled by the earlier delay.

Ratio Decidendi: An order passed without service of notice and without affording a hearing cannot be sustained, and a delayed challenge to such an ex parte order may be entertained where the denial of natural justice goes to the root of the assessment.

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